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Funding into Battery Storage companies was up in the first half

Mercom Capital Group, llc, a global clean energy communications and consulting firm, released its report on funding and mergers and acquisitions (M&A) activity for the Battery Storage, Smart Grid, and Energy Efficiency sectors for the second quarter (Q2) and first half (1H) of 2018.

Total corporate funding (including venture capital funding, public market, and debt financing) in 1H 2018 was down with $2.4 billion raised compared to $2.8 billion raised in 1H 2017, a 14 percent decrease year-over-year (YoY). The decline in funding in 1H was due to lower funding activity in Smart Grid and Efficiency categories while funding increased in the Battery Storage sector.

In Q2 2018, VC funding for Battery Storage, Smart Grid, and Efficiency companies decreased to $367 million in 27 deals compared to $472 million in 23 deals in Q1 2018. Funding amounts were 33 percent lower YoY compared to the $591 million raised in 24 deals in Q2 2017.

VC funding for Battery Storage companies in 1H 2018 was 12 percent higher with $539 million compared to the $480 million raised in 1H 2017.

Top 5 VC deals in 1H 2018: $80 million raised by Stem, $71 million raised by sonnen, $65 million secured by Ionic Materials, Durapower’s $40 million, and $40 million raised by Ice Energy. A total of 34 VC investors participated in Battery Storage funding in 1H 2018.

Announced debt and public market financing activity in the first half of 2018 ($142 million in five deals) was 10 percent higher compared to the first half of 2017 when $129 million was raised in nine deals.

There were four announced Battery Storage project funding deals in 1H 2018 bringing in a combined $34 million compared to $5 million in two deals in 1H 2017.

In 1H 2018 there were a total of eight (one disclosed) Battery Storage M&A transactions, compared to two transactions (one disclosed) in 1H 2017. There were four Battery Storage M&A transactions in Q2 2018. By comparison, there were four Battery Storage M&A transactions in Q1 2018 and one transaction in Q2 2017.

In the first halves of 2018 and 2017, there were two Battery Storage project M&A transactions each. There were two Battery Storage project M&A transactions in Q2 2018. By comparison, there were no Battery Storage project M&A transactions in Q1 2018 and two transactions in Q2 2017.

Smart Grid

VC funding for Smart Grid companies in 1H 2018 was 56 percent lower with $135 million compared to the $304 million raised in 1H 2017.

In Q2 2018, VC funding for Smart Grid companies decreased to $60 million in four deals compared to $75 million in seven deals in Q1 2018. The funding amount was 57 percent lower YoY compared to $139 million raised in eight deals in Q2 2017.

Top 5 VC deals in 1H 2018: $55 million raised by Smart Wires, $27 million raised by Bidgely, $20 million secured by Husk Power Systems, Mnubo’s $17 million, $6 million raised by Simple Energy. A total of 19 VC investors participated in Smart Grid funding in 1H 2018.

Announced debt and public market financing for Smart Grid companies came to $1.3 billion in two deals in 1H 2018 compared to $9 million in one deal in 1H 2017.

In 1H 2018 there were a total of five Smart Grid M&A transactions (all undisclosed), compared to 13 transactions (three disclosed) in 1H 2017. There were four Smart Grid M&A transactions in Q2 2018. By comparison, there was one Smart Grid M&A transaction in Q1 2018 and six transactions in Q2 2017.

Efficiency

VC funding for Energy Efficiency companies in 1H 2018 was 32 percent lower with $165 million compared to the $242 million raised in 1H 2017.

In Q2 2018, VC funding for Efficiency companies decreased to $67 million in six deals compared to $98 million in four deals in Q1 2018. Funding amounts were 131 percent higher YoY compared to $29 million raised in six deals in Q2 2017.

Top 5 VC deals in 1H 2018: $61 million and $36 million raised by ecobee in two separate deals, $27 million secured by Carbon Lighthouse, Redaptive’s $20 million, and $10 million received by Petros PACE Finance. A total of 20 VC investors participated in Energy Efficiency funding in 1H 2018.

Announced debt and public market financing activity in the first half of 2018 ($212 million in two deals) was 88 percent lower compared to 1H 2017 when $1.7 billion was raised in nine deals.

Property Accessed Clean Energy (PACE) financing deals in 1H 2018 came to $694 million in three deals compared to $668 million in same number of deals in 1H 2017.

In 1H 2018 there were a total of three Efficiency M&A transactions (all undisclosed), compared to five transactions (two disclosed) in 1H 2017. There were two Efficiency M&A transactions in Q2 2018. By comparison, there was one Efficiency M&A transaction in Q1 2018 and Q2 2017 each.